WinZO Crisis: Cofounders Arrested, Funds Frozen Amidst Regulatory Crackdown
Overview
Indian gaming unicorn WinZO faces a severe crisis after its cofounders were arrested by the Enforcement Directorate. Nearly ₹800 Cr in funds are frozen, crippling operations and leading to mass exits. The company is embroiled in money laundering investigations and legal battles, casting a shadow over its future.
Regulatory Storm Hits Indian Gaming
WinZO, once a beacon of India's real-money gaming (RMG) sector, is now unraveling amidst a severe regulatory and legal crisis. The company's operations have been crippled following the arrest of its cofounders, Saumya Singh Rathore and Paavan Nanda, by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act (PMLA). This crackdown follows stringent regulatory changes that have rocked India's RMG industry in 2025.
ED's Allegations and Asset Freeze
The ED's investigation, stemming from multiple First Information Reports (FIRs), alleges serious offenses including cheating, impersonation, and misuse of KYC details, leading to user financial losses. In November 2025, ED raids on WinZO premises resulted in the freezing of approximately ₹505 Cr in assets, identified as proceeds of crime. Sources indicate the total frozen funds now stand between ₹700-880 Cr, leaving the company with minimal usable capital of around ₹15 Cr.
Financial Fallout and Operational Collapse
The freezing of funds has triggered a severe cash flow crisis for WinZO. The company has seen approximately 70% of its workforce exit in recent months. Unsettled salary payments and vendor dues are piling up, with Paytm reportedly approaching the National Company Law Tribunal (NCLT) over unpaid dues. Efforts to expand into new ventures like Zo TV have also reportedly stalled amidst the turmoil.
Legal Battles and Uncertain Future
While cofounder Saumya Singh Rathore was granted bail, Paavan Nanda remains in judicial custody, leaving the company's leadership fractured. WinZO is currently engaged in legal battles, including a plea in the Karnataka High Court challenging the ED's jurisdiction and seeking relief from the fund freeze. The company, which reported revenues exceeding ₹1,055 Cr in FY24, now faces an uncertain future, with mounting legal expenses and operational paralysis.
